Why Is Outfront Media (OUT) Down 6.2% Since Last Earnings Report?

A month has gone by since the last earnings report for Outfront Media (OUT). Shares have lost about 6.2% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Outfront Media due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for OUTFRONT Media Inc. before we dive into how investors and analysts have reacted as of late.

OUTFRONT Media Beats Q4 AFFO, Guides for Double-Digit Growth in 2026

OUTFRONT Media reported fourth-quarter 2025 adjusted funds from operations (AFFO) per share of 73 cents, surpassing the Zacks Consensus Estimate of 71 cents. This compares favorably with the FFO per share of 69 cents reported in the year-ago period.

The results reflected continued momentum in transit advertising and expanding margins, partially offset by modest softness in billboard revenues. The company’s management expects double-digit AFFO growth in 2026.

Total revenues for the quarter came in at $513.3 million, up 4.1% from the prior-year period. However, the top line missed the Zacks Consensus Estimate of $514.4 million. Growth was primarily driven by strong performance in the transit segment, while billboard revenues remained relatively stable.

Segment Performance in Detail

Billboard revenues totaled $376.6 million in the quarter, increasing 0.5% year over year. Growth in average revenue per display (yield), particularly from digital billboards and programmatic channels, helped offset the impact of lost displays and selective contract exits. Our estimate was pegged at $378.8 million.

Transit revenues were the clear standout, rising 15.7% year over year to $134.8 million. The increase was largely driven by improved yield per display and strong advertiser demand across key metropolitan markets, including New York. Our estimate was pegged at $133.9 million.

Profitability & Margins

Adjusted OIBDA for the fourth quarter increased 12% year over year to $173.8 million. The adjusted OIBDA margin expanded to 33.9% from 31.5%, demonstrating operating leverage, particularly within Transit.

OUTFRONT Media’s operating income totaled $133.5 million in the fourth quarter, up 20.2% from the prior-year period. Operating income improved year over year as revenue gains outpaced cost growth. While certain expenses, including inflation-linked minimum annual guarantees tied to transit contracts such as the New York MTA, remain a structural cost factor, disciplined expense management and yield growth supported margin expansion.

Net interest expense for the fourth quarter of 2025 was $36.9 million, marginally up from $36.6 million in the prior-year quarter. The slight increase was mainly driven by higher interest rates. As of Dec. 31, 2025, the weighted average cost of debt was 5.3%, marginally lower than 5.4% a year earlier. Our estimate was $35.5 million.

Balance Sheet & Liquidity

As of year-end 2025, OUTFRONT Media maintained solid liquidity. The company had access to nearly $750 million of committed liquidity, including availability under its revolving credit facility and accounts receivable securitization program.

Total debt stood at approximately $2.6 billion, with net leverage around 4.7x, within its 4x to 5x target range. While leverage remains elevated relative to some REIT peers, it appears manageable, given improving AFFO and stable cash flow generation.

The company did not issue equity under its at-the-market program during the quarter, preserving shareholder value while retaining $232.5 million of capacity for potential future needs.

2026 Guidance

OUT’s management expressed confidence in achieving “comfortably double-digit” AFFO growth in 2026, supported by continued transit momentum, further digital yield expansion and operational efficiencies. They also flagged event-driven upside (notably FIFA’s World Cup host-city activity) and incremental benefit from digital and programmatic channels.

Management indicated total 2026 capital expenditures of roughly $90 million, including $30 to $35 million of maintenance capex. The balance will be directed toward growth initiatives, primarily for digital conversions and new digital boards.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in fresh estimates.

The consensus estimate has shifted 20.55% due to these changes.

VGM Scores

At this time, Outfront Media has a average Growth Score of C, however its Momentum Score is doing a bit better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Outfront Media has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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This article originally published on Zacks Investment Research (zacks.com).

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